Jain Irrigation Systems (NSE:JISLJALEQS) investors are up 11% in the past week, but earnings have declined over the last five years

The worst result, after buying shares in a company (assuming no leverage), would be if you lose all the money you put in. But on the bright side, you can make far more than 100% on a really good stock. For instance, the price of Jain Irrigation Systems Limited (NSE:JISLJALEQS) stock is up an impressive 280% over the last five years. On top of that, the share price is up 19% in about a quarter. But this move may well have been assisted by the reasonably buoyant market (up 8.8% in 90 days).

Since it's been a strong week for Jain Irrigation Systems shareholders, let's have a look at trend of the longer term fundamentals.

See our latest analysis for Jain Irrigation Systems

To quote Buffett, 'Ships will sail around the world but the Flat Earth Society will flourish. There will continue to be wide discrepancies between price and value in the marketplace...' One imperfect but simple way to consider how the market perception of a company has shifted is to compare the change in the earnings per share (EPS) with the share price movement.

During the five years of share price growth, Jain Irrigation Systems moved from a loss to profitability. That kind of transition can be an inflection point that justifies a strong share price gain, just as we have seen here.

The image below shows how EPS has tracked over time (if you click on the image you can see greater detail).

It might be well worthwhile taking a look at our free report on Jain Irrigation Systems' earnings, revenue and cash flow.

A Different Perspective

Jain Irrigation Systems shareholders are up 13% for the year. But that return falls short of the market. If we look back over five years, the returns are even better, coming in at 31% per year for five years. It may well be that this is a business worth popping on the watching, given the continuing positive reception, over time, from the market. It's always interesting to track share price performance over the longer term. But to understand Jain Irrigation Systems better, we need to consider many other factors. To that end, you should learn about the 2 warning signs we've spotted with Jain Irrigation Systems (including 1 which makes us a bit uncomfortable) .

We will like Jain Irrigation Systems better if we see some big insider buys. While we wait, check out this free list of undervalued stocks (mostly small caps) with considerable, recent, insider buying.

Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on Indian exchanges.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.